The Dow Jones industrial average, S&P
500 and Nasdaq all turned in lackluster performance last week, with
each posting declines of 0.2% to 0.5%. However, they’re still not far
from all-time highs set in early March; the S&P is down about 1%
from its record high.

Per Ritholtz Wealth Management, the
average stock in the S&P was down just 10% from its 52-week
high, and the median stock was off 6% from this high. If it sounds like
the math doesn’t add up, consider that the S&P is a
market-capitalization weighted index; meaning the biggest stocks count
for more than the smaller stocks.

The Federal Reserve is expected to hike interest rates when they wrap
up their policy meeting on Wednesday; there are also monetary decisions
due from the Bank of Japan and the Bank of England on Thursday; German
Chancellor Angela Merkel will meet President Trump; and The Netherlands
is holding a closely-watched election.

Plus, the U.K. could formally trigger Brexit negotiations. Scotland’s First Minister Nicola Sturgeon on Monday confirmed plans for a second Scottish independence referendum.

Wednesday is decision day for the rate-setting Federal Open Market
Committee (FOMC), and traders give it a 100% chance of raising the
federal funds rate by a quarter point, to 0.75% to 1%. Friday’s jobs
report gives policy makers a green light to hike.

An additional 235,000
jobs in February, a 4.7% unemployment rate, and wage growth of 2.8% over
the past 12 months tick off one box for the Fed’s mandate; and the Fed
is leery of wage-push inflation. Of course, the flip side of the
argument is that there is still plenty of slack in the labor market, we
are nowhere near full employment, and the Fed is overly sensitive to
inflation.

The open question is whether the Fed will indicate they will
continue with a couple more rate hikes this year, or maybe up guidance
to 3 more hikes. It is a delicate balancing act for the Fed: raise rates
too slowly and the inflation hawks will claim the Fed is falling behind
the curve; raise rates too fast or too far and the Fed risks a shock to
financial markets, a halt to hiring, and a possible recession.

It looks
like the Fed’s era of easy money is coming to an end – they appear set
to raise rates, above historic lows, back to more normal levels;
probably in a very gradual, well-communicated manner. And the Fed has
been very outspoken that they will raise rates; and the markets believe
them. The difference this time is that there appears to be fiscal policy
that can carry the economic torch. Time will tell if there is a smooth
hand-off.

The Fed’s action will affect almost everyone, even if you don’t
invest on Wall Street. Look for higher interest rates on credit cards,
car loans, and mortgages – all of which could slow down consumers. For
savers, don’t expect a quick uptick in returns on CD’s and bonds – while
rates are going higher, there is usually a lag time; still we have seen
the rate on the 10-year Treasury note hit 2.6%, breaking out of a very
long-term bond bull trendline.

The Congressional Budget Office projects that 14 million people will
lose coverage by 2018 under the Republican ObamaCare replacement bill.
24 million would lose coverage by 2026. The CBO score is way worse than
most analysts had expected. Most thought 10-15 million could lose
coverage, not 24 million.

The CBO estimates a disproportionate increase
in people losing insurance coverage in the 50 to 64 age group with low
to medium incomes. The CBO, along with the Joint Committee on Taxation, estimated that the bill would
decrease the federal deficit by $337 billion over the next 10 years.

The report also estimated the impact on premiums in the individual
market, saying that costs would increase in 2018 and 2019 before
declining thereafter. The CBO and JCT did say that provisions of the
AHCA would raise premiums for older Americans “substantially” while
shrinking them for younger Americans.

The long-awaited analysis from the nonpartisan congressional
scorekeeper is sure to shake up the debate over the measure, which is
already facing sharp criticism from conservatives and many centrist
Republicans. The GOP bill repeals ObamaCare’s subsidies to buy coverage,
replacing them with smaller tax credits. The law would also cut
Medicaid. Both moves were expected to lead to coverage losses.

The White
House has already started complaining that the CBO analysis is flawed
but remember last Friday’s jobs report; for years, Trump had complained
the jobs numbers were phony, until last month came in good and then he
admitted the numbers were real. And while the nonpartisan Congressional
Budget Office economic estimates are not perfect, they are immensely
better than any economic estimates from the White House.

Intel will purchase
driverless technology firm Mobileye for more than $15 billion in
cash. The deal values Mobileye at $63.54 a share, a 34% premium to its
closing price Friday. Mobileye makes chip-based camera systems that
power semi-automated driving features that are already being used in
cars today and is working to put that technology in the center of
self-driving cars of the future.

Mobileye has supply and tech-sharing
agreements with several auto makers and other auto suppliers. Intel CEO
Brian Krzanich said the deal “merges the intelligent eyes of the
autonomous car with the intelligent brain that actually drives the car.”
Self-driving vehicles are likely to be one of the most ubiquitous
technologies over the next few years, with many manufacturers
committing to launching autonomous ride-hailing services, and even
consumer cars, by the end of the decade.

And Intel wants to be at the
heart of these machines, whether with the vision systems used to see the
road, or with the processors making sense of all the information cars
will be receiving. When you consider that Intel missed the boat on
smartphones, it seems to make sense that they would try to get an inside
track on the next big thing in tech.

Lloyds
is set to agree a £1.3-billion-pound contract with IBM to outsource
many of its computer systems and shift more than 1,900 jobs to the IT
services provider. The deal will see most of the transferred employees
lose their jobs after four years. Lloyds hopes to cut almost
£760-million-pounds of costs.

The federal board overseeing Puerto
Rico’s finances is meeting today in New York, where it must decide on a
plan for ending its chronic deficits. The island hopes to restructure
more than $110 billion of debt and pension obligations, but it must
first produce a credible fiscal plan. Last week, the board told Gov.
Ricardo Rossello his proposal was unrealistic and asked him to make
revisions.

South Korea’s impeached president finally left office.Park Geun-hye departed the Blue House on
Sunday, her motorcade flanked by supporters as she headed to her home
in the posh Gangnam district of Seoul. She could face prosecution and
jail time for the corruption scandal that led to her ouster.

The striking union at
BHP Billiton’s Escondida copper mine in Chile, the world’s largest,
said it will not accept the company’s offer to return to the negotiating
table, and called on BHP to clarify its negotiating positions. During
the strike, which started on Feb. 9, Escondida’s 2,500-member Union has
repeatedly said it has three non-negotiable demands the company must
commit to before starting discussions.

Cameron and Tyler Winklevoss,
the twins famous for butting heads with Mark Zuckerberg over
Facebook, were denied permission Friday by the Securities and Exchange
Commission to launch a bitcoin exchange-traded product (also known as an
ETP). The SEC said it rejected the proposal because it was inconsistent
with the agency’s Exchange Act rules, and the markets for bitcoin are
unregulated.

Many tax liens
and civil judgments soon will be removed from people’s credit reports,
the latest in a series of moves to omit negative information from these
financial scorecards. The development could help boost credit scores for
millions of consumers.

The three major credit-reporting firms —
Equifax, Experian and TransUnion — decided to remove tax-lien and
civil-judgment data starting around July 1, if that data don’t include a
complete list of a person’s name, address, as well as a social security
number or date of birth. Many liens and most judgments don’t include
all three or four.

New York City is preparing for what could be the season’s worst
snowstorm. The National Weather Service issued a blizzard warning for
New York City, forecasting 12 to 20 inches of snow and winds between 25
and 35 mph on Tuesday.

The nor’easter is expected to cripple much of the
Northeast. Public schools in Philadelphia, Boston and New York City
have already canceled classes for Tuesday. Flights within, into or out
of the United States on Monday saw 2,613 delays and another 1,524
cancellations as of 5 p.m., ET. Another 4,779 flights originally
scheduled for Tuesday were canceled.

American Airlines, United
Airlines and Delta Air Lines issued travel alerts and began waiving
re-booking fees for flights within affected regions. Amtrak said it
would operate on a modified schedule in the Northeast on Tuesday. A
flood watch is expected to go into effect Tuesday for coastal regions in
New York.

Disclaimer: The material appearing on this site is based on data and information from sources we believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does it purport to be complete. Opinions and projections, both our own and those of others, reflect views as of dates indicated and are subject to change without notice. The contributions and opinions of others do not necessarily reflect the views of Marvin Clark, Monsoon Wealth Management, or Fixed Income Daily. Nothing appearing on this site should be considered a recommendation to buy or to sell any security or related financial instrument. Investors should discuss any investment with their personal investment counsel. Past performance does not guarantee future results.